Retail’s Dirty Little Secret: How Poor Stock Rotation Eats Your Profits (And What to Do About It)

Introduction
Walk into any retail store, and you’ll see the same silent profit killer: expired or poorly rotated stock. It’s not glamorous, but it’s costing you real money—not just in wasted inventory, but in lost customer trust and operational inefficiency.

As a CGO, I’ve learned that the most powerful growth levers are often the least sexy. Here’s how we’re tackling one of retail’s most pervasive problems.

The High Cost of Getting It Wrong

• Stat to Shock: The grocery industry alone loses $10B annually to expired goods (NRF)

• Hidden Impacts:

  • Customers who find expired products won’t return

  • Cluttered OSDs reduce perceived brand value

The Fix: A Three-Part Playbook

1. Merchandising as a Science

• The 100% Full Rule: An OSD at 80% capacity doesn’t sell 20% less—it sells 50% less (Kantar research). Train teams to treat empty space like a crime scene.

• Eye-Level = Buy-Level: Best sellers get prime real estate. Use planograms religiously.

• Price Visibility Hacks:

  • Tags at a 45° angle for better sightlines

  • Battery-powered LED price strips for high-traffic areas

2. FIFO: Beyond the Poster on the Wall

• The "Backhand" Method: New stock must be shelved from behind. Implement color-coded labels (e.g., blue for new, red for expiring).

• Tech Assist:

  • Mobile scanners that flag soon-to-expire items during restocking

  • Digital dashboards showing expiry hotspots by store

3. Accountability That Sticks

• The Photo Audit: Require managers to submit 5 shelf photos weekly—3 "best" and 2 "worst." Public recognition/pressure works.

• Penalty Stack:
  1st FIFO fail: Retraining
  3rd fail: Store manager review + margin impact added to their P&L

The Leadership Mindset Shift

This isn’t about "checking boxes." It’s about recognizing that:

• Every expired product is a leadership failure—not a store-level mistake

• Consistency beats occasional excellence—audit when things are "good," not just when they break

Your Move
Start this week:

1. Conduct surprise FIFO audits at your 3 worst-performing stores

2. Share the photos (yes, the ugly ones) in your next leadership meeting

The best brands aren’t built on grand campaigns—they’re built on thousands of perfect executions at the shelf.